The Perils of Real Estate at Arm's Length
Tuesday, April 14, 2009
Source: Barron's
Barron's reports: It may not rank up there with the tech and housing bubbles. But troubles in commercial real estate have deflated a once highflying market for property investment known as TICs.
TIC stands for tenant-in-common, a form of ownership that has exploded in popularity among real-estate investors in recent years. The TIC format became a favorite vehicle for property owners crafting 1031 exchanges, named for a section of the federal tax code that allows sellers of income-producing real estate to defer capital-gains taxes if they roll over their sales proceeds into other income property within six months.
At their peak, in 2005 -- when housing and commercial real estate were on a tear -- TIC property transactions totaled slightly more than $7 billion, says Dan Fasulo, managing director of research at Real Capital Analytics. But in the next three years, volume slid sharply. Last year, says Fasulo, it fell below $1 billion; a scant 42 deals were done nationwide.
View the full article on Barron's: The Perils of Real Estate at Arm's Length
Posted by: Nina Turner